Blades Inc Purchasing Power Parity case study

BLADES, INC. CASE

Purchasing Power Parity case study

When Thailand have higher level of inflation, it will bring bad impact towards the U.S. Blades Company, because higher level of inflation in Thailand will make the currency of Thai Bath become weaker and the price of the local products will increase. As we know that Blades import the raw material from Thailand to lower the cost of production, and when the price of local products (raw material) increase, it will increase Blade's cost of production and hence, it will make the selling price of Blades increase.

From the export and import point of view, when the inflation in Thailand is high, the price of the local product will be higher because Thai Bath will be weaker, and thus, people will...